The chief executive who resigned from Lancashire’s ill-fated One Connect Limited 18 months ago is now stepping down from its sister company.

David McElhinney, who quit the doomed OCL in September 2013 with a bumper £600,000 pay-out, is expected to leave Liverpool Direct Limited in the next few weeks with another six-figure golden handshake.

County Hall

News of Mr McElhinney’s £400,000 departure package has caused controversy on Merseyside where council tax payers look set to foot some of the bill. An 18-month investigation by Lancashire Constabulary into claims of mis-management at the now defunct One Connect is continuing. It is more than a year since officers raided three houses - one of them understood to be owned by Mr McElhinney.

One of the others was in Preston, although former County Hall leader Coun Geoff Driver, who worked alongside Mr McElhinney in setting up the strategic partnership between LCC and telecom giants BT, has denied the Fulwood address was his.

Detectives have declined to discuss what stage their inquiry into OCL has reached, apart from confirming it is “ongoing.” A spokesman insisted it would be “inappropriate to comment any further at this time.”

One Connect was shut down more than a year ago after accountants revealed Labour had inherited a company from the Tories which had overspent to the tunne of almost £1m a month.

The operation was set up in 2011 to run services on behalf of the county council, pledging to save the authority £400m in a decade.

But when Labour took control of County Hall in May 2013 the new administration revealed it had serious misgivings about the partnership, especially as the similar LDL deal on Merseyside was said to have cost Liverpool Council millions.

Within five months the OCL chief executive had resigned, taking with him a remuneration package of more than £600,000. LCC chief executive Phil Halsall was first suspended and then resigned as an investigation was launched. Police were called in and in November 2013 revealed they were investigating “financial irregularities.”